Larson, Courtney ask Mnuchin for crumbling-foundation tax break
WASHINGTON – Reps. Joe Courtney and John Larson asked Treasury Secretary Steven Mnuchin on Monday to allow a tax break for thousands of Connecticut homeowners plagued by crumbling foundations.
The lawmakers had written to Mnuchin in May seeking help for homeowners in three dozen towns in north-central and northeast Connecticut where foundations were built with concrete that contained a mineral called pyrrhotite from a quarry in Willington. Pyrrhotite expands with moisture, causing foundations to bow and crack, damage that is usually not covered under a homeowner’s insurance policy.
Courtney and Larson, who sits on the tax-writing Ways and Means Committee, asked Mnuchin and the Internal Revenue Service to use their authority to allow these homeowners to take casualty losses for the cost of repairing their foundations. That means the homeowners could deduct foundation repair costs from their taxable income.
The lawmakers estimate repairs could cost from $100,000 to $200,000 per home.
“We discussed several possible options for federal assistance through the IRS and the Treasury Department, and we were encouraged by their understanding of the situation facing Connecticut homeowners and commitment to working with us toward a solution,” Larson, D-1st District, and Courtney, D-2nd District, said in a joint statement. “We will continue to work with Treasury and with the IRS as they consider legal issues in the tax code to secure some relief for homeowners
While casualty losses are usually defined as a sudden, uninsured loss, the lawmakers say the IRS made an exception for homeowners in the southeastern United States whose homes were built with defective Chinese drywall.
The lawmakers said help from the IRS is only one form of possible relief for homeowners with crumbling foundations, who need “a concerted effort at the municipal, state and federal level.”
“As we have said all along, there is not going to be one silver bullet that solves the entire problem for homeowners,” the lawmakers said.
The Treasury Department did not have an immediate response to questions regarding the issue.
The effort to obtain a tax break for Connecticut homeowners is backed by National Taxpayer Advocate Nina Olson. She heads an independent office in the IRS that aims to resolve taxpayer problems.
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